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The chief executive of the second-largest pension scheme in the UK has blasted proposed changes to the main framework for pensions in Europe, warning they would push even its resources and funding levels to the limit.

Tom Merchant, chief executive of the £34bn Universities Superannuation Scheme, confirmed that USS had participated in an impact study relating to the European Commission's Institutions for Occupational Retirement Provision, or Iorp, directive. However, he said this in no way demonstrated support for some of the proposals included in the directive.

Merchant was speaking at the National Association of Pension Funds conference last week, and was referring to a quantitative impact study, or QIS, launched by the European Insurance and Occupational Pensions Authority – the supervisory body for insurance companies and pension schemes in Europe.

In April 2011 the EC asked Eiopa for advice on the EU-wide legislative framework for Iorp.

The QIS, which will last until mid-December, has been targeted at nine countries – Belgium, France, Germany, Ireland, Netherlands, Norway, Portugal, Sweden and UK – and seeks opinions on how possible changes to the Iorp directive would impact pension schemes in these countries.

The changes, proposed by Eiopa, would introduce, among other things, a “holistic balance sheet” approach to pension scheme valuation and the introduction of Solvency II-style capital requirements for retirement funds.

Merchant said: “Engagement [in the quantitative impact study] is a complex and time-consuming exercise. Providing commentary on the QIS in no way suggests our acceptance of a Solvency II regime. We continue to be concerned that our participation in these developments gives support and credence to these proposals, and that is not the case.”

The USS is not a typical defined-benefit pension scheme, he said. It is still open to new members – along with only 10% of schemes in the UK. It has a growth-seeking investment strategy, while most have liability-matching strategies; and it is sponsored by the university sector, giving it hundreds of sponsors to look to for support.

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However, even with USS's resources, Merchant said the QIS and its impacts are still taking time to understand. Lack of clarity from Eiopa on what it will do with responses when the QIS is completed was “worrying” and “not encouraging”, he added.

His comments echoed those of Mark Hyde Harrison, chairman of the NAPF, who last week encouraged members to get involved in the QIS to illustrate the challenges that it poses to the pensions sector.

Merchant said one of the big problems with the concept of the ”holistic balance sheet” – which takes into consideration assets, liabilities and the support pension funds get from their parent companies and industry safety nets – is how to value the additional support. He said it would be “a monumental job” to place values on the concept of sponsor support, and to then put that value on the asset side of a balance sheet.

USS has made some calculations of its own. It found that changes to the Iorp directive would mean USS’s liabilities would be valued at £63bn, far greater than the current valuation of its liabilities. It has assets, meanwhile, of £34bn, leading to a huge shortfall – and, in turn, heavier reliance on sponsor support.

He also questioned the inclusion of the UK’s Pension Protection Fund, which is a safety net for schemes that fail, as an asset on the holistic balance sheet.